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September, 2007 - Newsletter for the Maui Market
Aloha! Here is your eNewsletter from Jim Foster
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Make sure you check out the Useful Internet Sites at the end of this newsletter which includes some valuable information.
Don't forget! We provide a free Automatic E-mail Notification Service that goes out to specific recipients when ever a new listing becomes available for a particular condominium complex. Each of these notifications includes a link to view the details of the brand new listing in the MLS. We DO NOT SHARE YOUR EMAIL ADDRESS or your contact information with anyone. To subscribe to our Automatic E-mail Notification Service, please send Won an email at Won@JamesBFoster.com with your first and last name, your email address, and the condominium property you wish to be notified of.
Another service we provide is the Condominium Real Estate Market eUpdates which is sent out periodically to inform potential buyers and owners of specific condominium properties about the real estate market activities at those properties. This service is provided exclusively for those interested or owns a condominium property on West Maui. If you would like to subscribe to the Condominium Real Estate Market eUpdates or to get a list of all condominium properties that are included in the eUpdates, email Won at Won@JamesBFoster.com.
Property for Sale in New Developments in West Maui
A new commercial development in Lahaina - New Class “A” three story ocean view professional condominium office complex with 8 out of 18 suites available from 847 square feet to 1495 square feet with completion anticipated to be the summer of 2008. There are also going to be true Showroom/Flex Bldg condos with 4 out 10 units available from 800 square feet to 1600 square with completion anticipated to be the summer of 2008. Contact us for more detailed information as to what is available.
A new residential development at Kapalua Bay will be comprised of just 84 three- and four-bedroom condominiums, in four intimate, low-rise clusters, located in the very heart of the property. Beginning at the shoreline and terraced up a gentle slope, each Private Residence will offer its own distinctive ocean views and classic Hawaiian sense of place. Residences will span from 3,002 to 4,271 square feet, including 600 to 1,150 square-foot lanais, celebrating Hawaii’s lively indoor-outdoor lifestyle. Uninterrupted vistas of Lanai and Molokai and dramatic sunsets will form the backdrop for each heavenly day.
A new condominium villas development - These Villas will be located in eight separate buildings on the twenty four acre site of the old Royal Lahaina Resort; the first resort developed at Kaanapali Beach and will consist of two bedroom units from 2,482 square feet up to four bedroom units with 4,807 square feet. If you would like more information please contact Jim at 1-888-661-7994 or send an email to Jim@JamesBFoster.com
A newly remodeled resort condominium property in the heart of historic Lahaina. Located within the Natural Historic District of 19th century Lahaina, it is unlike any other. With nearly nine acres of property, it presents the first opportunity to purchase completely redesigned fee-simple condominium residences in downtown Lahaina in over a decade.
A new condominium development - Located in Lahaina and consisting of two bedroom and three bedroom condominiums across the street from the Cannery Mall and Lahaina Gateway. Sizes range from 1,239 square feet to 1,321 square feet for the three bedroom units up to 1,820 square feet with a home office 10’-6” X 11’. The two bedrooms are approximately 1,201 to 1,231. This is in the pre-construction stage and for sales information you can call Jim at 1-888-661-7994 or send an email to Jim@JamesBFoster.com.
A New Land Development - 28 fee simple ocean view agricultural-zoned lots set on 450 acres of West Maui's historic lands. The 28 lots offered for sale are from 2.79 acres to 13.27 acres and range in price from $1,125,000 to $1,395,000. Two water meters and underground utilities to each lot. CC&R's do not allow any further subdivision. Just 20 minutes to Kihei/Wailea, Kahului and Kaanapali, directly across the street from Ukumehame Beach Park and famous "Thousand Peaks" surfing beach. Access by appointment only. See attached "Associated Project Documents". Two water meters and underground utilities to each lot. The CC&R's do not allow any further subdivision. The land offers residents some of the most breathtaking views imaginable - dramatic mountains and valleys to the East, and 180 degree ocean views to the West overlooking the islands of Lana'i and Kaho'olawe. With preservation lands to the North and South, you can rest assured that your privacy and views will be protected forever. Directly across the street, and well within strolling distance, you'll find Ukumehame Beach Park and world-famous "Thousand Peaks" surf break. For sales information you can call Jim at 1-888-661-7994 or send an email to Jim@JamesBFoster.com.
A new condominium development - Honua Kai - Located on the last stretch of beachfront in Ka'anapali, Honua Kai is the first whole ownership condominium resort to be built on the beach in over 20 years. Amenities include three spectacular pools, a boutique spa, underground parking with valet for owners and the recently announced Duke's Maui restaurant. Currently available is a one bedroom for $760,000 with 615 s.f.; 2 two bedrooms at $1,650,000 with 1,230 s.f. and one at $1,950,000 with 1,315 s.f.; and 3 three bedrooms at $2,100,000 with 1,610 s.f., $3,850,000 with 2,230 s.f. and $5,600,000 with 2,715. s.f. For sales information, you can call Jim at 1-888-661-7994 or send an email to Jim@JamesBFoster.com.
A new residential development in the Wailea area - Papali covers 10 expansive acres with only 24 homes - each a single family residence with two private entries and a generous amount of privacy. Because Papali is nestled on a gently-sloping site that’s terraced into four building “benches”, each and every residence commands a breathtaking ocean view. There are no bad locations. Low-pitched roofs and low-growth landscaping ensures each home’s view is protected.
A new residential development in the Wailea area - Ho'olei features spacious two-story town homes with finely appointed interiors, private elevators, and attached garages, marrying the virtues of a free-standing residence with the convenience of condominium living. Ho'olei has broad, west-facing ocean views and is surrounded on three sides by the Wailea Blue Golf Course. Located just across Wailea Alanui Drive from the Grand Wailea Resort Hotel & Spa and the Four Seasons Resort Maui, Ho'olei sets the standard for beauty and quality in planning, design and construction.
A luxury home community in Wailea area - Kanani Wailea, the latest offering from Pacific Land & Homes, is a planned community consisting of thirty-eight spacious homes with spectacular ocean views. The single-family homes, designed with old Hawaii charm and new Hawaii elegance, will have the amenities of condominium living, including a recreation center, swimming pool, security and maintained landscaping.
A luxury home community in Wailea area - Kai Malu offers maintenance-free living in attached single-family homes featuring luxury appointments and unparalleled quality. The homes are designed for indoor/outdoor living, taking advantage of the natural tropical environment and the magnificent views of ocean, mountains, islands and sunsets. All of these elements combine to offer a special place where residents can enjoy the much sought after Hawaiian lifestyle in the heart of Wailea, on the best island in the world, Maui.
Wailea Beach Villas – Located below the Shops of Wailea between The Marriot and Grand Wailea Hotel, 98 luxury condos will include: Penthouse Building: 5 stories high, total 60 units – five 3 and 4 bedroom plans, level 3, 4 and 5 have great views ~ 37 – 45 ft high; The Villa Buildings: 2-3 story buildings toward the ocean front portion of the complex, 38 units – 2-3 bedroom plans, ~ 15 ft above sea level.
The West Maui real estate market continues to transition from a Seller’s market to a Buyer’s market. The current inventory of West Maui condominiums for sale is now at 469 and seemed to peak at 491 on April 18th and has gone down since. Properties are requiring more time to sell and Buyers have a much larger inventory of properties for sale to choose from. If you’re curious about current trends in Maui real estate and where the market is headed, the answer is - it depends on Location - it depends on if it is condominium or single-family residential - it depends on whether you look at volume, average or median prices. The current Maui real estate market looks steady with minor variations.
Condominiums for Sale - In the West Maui real estate market, at the beginning of July, 2005 there were 165 condominiums for sale in the West Maui area and the total value was $159,356,997.00; August, 2005 - 166 condominiums with the total value of $154,446,497.00; September, 2005 - 176 condominiums with the total value of $163,215,390.00; October, 2005 - 177 condominiums with the total value of $168,464,220.00; November, 2005 - 199 condominiums with the total value of $188,377,265.00; December, 2005 - 231 condominiums with the total value of $222,669,115.00; January, 2006 - 226 condominiums with the total value of $226,520,200.00; February, 2006 - 280 condominiums with the total value of $281,793,835.00; March, 2006 - 297 condominiums with the total value of $286,082,559.00; April, 2006 - 350 condominiums with the total value of $317,599,199.00; May, 2006 - 354 condominiums with the total value of $321,932,077.00; June, 2006 - 362 condominiums with the total value of $333,616,070.00; July, 2006 - 392 condominiums with the total value of $346,937,598.00; August, 2006 - 393 condominiums with the total value of $344,119,142.00; September, 2006 - 413 condominiums with the total value of $369,322,455.00; October, 2006 - 408 condominiums with the total value of $366,608,574.00; November, 2006 - 407 condominiums with the total value of $357,086,324,00; December, 2006 - 428 condominiums with the total value of $361,399,109.00; January, 2007 - 410 condominiums with the total value of $372,238,031.00; February, 2007 - 431 condominiums with the total value of $393,681,669.00; March, 2007 - 458 condominiums with the total value of $420,941,268.00; April, 2007 - 479 condominiums with the total value of $429,708,159.00; May, 2007 - 472 condominiums with the total value of $424,095,260.00; June, 2007 - 455 condominiums with the total value of $415,187,129.00; July, 2007, there were 475 condominiums with the total value of $432,797,008.00; August, 2007, there were 469 condominiums with the total value of $420,479,301.00; and at the beginning of September, 2007 there are 474 condominiums for sale in the West Maui area with the total value of $430,914,408.00. The condominium for sale inventory since July, 2005 has been as low as 165 and is up to 474 for September 3, 2007. The “for sale” inventory on West Maui continues to increase.
Condominium Sales in 2006 - The total condominium sales for West Maui during the month of January, 2006 there were 42 sales and the total value was $28,574,643.00; for February, 2006 there were 48 sales and the total value was $32,995,078.00; for March, 2006 there were 40 sales and the total value was $32,199,584.00; for April, 2006 there were 43 sales and the total value was $41,898,525.00; for May, 2006 there were 51 sales and the total value was $39,644,886.00; for June, 2006 there were 40 sales and the total value was $32,533,500.00; for July, 2006 there were 30 sales and total value was $26,212,000.00; for August, 2006 there were 28 sales and the total value was $31,885,500.00; for September, 2006 there were 30 sales and the total value was $24,770,000.00; for October, 2006 there were 29 sales and the total value was $23,359,299.00; for November, 2006 there were 22 sales and the total value was $13,414,600.00; for December, 2006 there were 30 sales and the total value was $23,169,999.00. For 2006, the monthly average sales were 36 sales per month with the average sales value of $29,221,468.00 per month.
Condominium Sales in 2007 - The total condominium sales for West Maui during the month of January, 2007 there were 37 sales and the total value was $33,091,000.00; for February, 2007 there were 26 sales and the total value was $16,330,000.00; for March, 2007 there were 32 sales and the total value was $24,121,000.00; for April, 2007 there were 27 sales and the total value was $16,766,000.00; for May, 2007 there were 28 sales and the total value was $30,774,929.00; for June, 2007 there were 28 sales and the total value was $18,917,000.00; for July, 2007 there were 21 sales and the total value was $13,314,200.00; and for the month of August, 2007 as of 9/3/07 in the MLS data, there were 31 sales and the total value was $32,328,999.00. The monthly average sales were 29 sales per month with the average sales value of $23,205,391.00 per month.
The total condominium sales for August, 2005 was 52; September, 2005 - 58; October, 2005 - 38; November, 2005 - 48; December, 2005 - 47; January, 2006 - 42; February, 2006 - 48; March, 2006 - 40; April, 2006 - 43; May, 2006 - 51; June, 2006 - 40; July, 2006 - 30; August, 2006 - 28; September, 2006 - 30; October, 2006 - 29; November, 2006 - 20; December, 2006 - 30; January, 2007 - 37; February, 2007 - 26; March, 2007 - 32; April, 2007 - 27; May, 2007 - 28; June, 2007 - 28; July, 2007 – 21; and August, 2007 was 31.
For previous condo sale details, go to our web site, www.JamesBFoster.com and click on Condo Sales. For the time period of 1/1/2007 to 7/31/2007 the average price for a home on Maui was $958,906.00 which is down 4% for the time period of 1/1/06 to 7/31/06 when the average price was $1,002,286.00. For the same time period the average price for a Fee Simple condo on Maui was $764,510.00 which is down 6% for the same time period when the average price was $809,602.00 according to the RAM (Realtor Assoc. of Maui) statistics. Condo sales in Wailea/Makena, Kapalua and Kaanapali impacting the Fee Simple Condo average price.
We have gone in to the MLS database and pulled information for 2000 through 2007. In 2000 - 654 condominium units sold in the West Maui area for a total value of $209,064,010; in 2001 - 605 condominium units sold for a total value of $271,681,337; in 2002 - 730 condominiums sold for a total value of $240,178,915; in 2003 - 737 condominiums sold for a total value of $319,748,466; In 2004 - 700 condominiums sold for a total value of $375,033,467; in 2005 - 682 condominiums for a total value of $408,582,315; in 2006 - 435 condominiums for a total value of $351,782,614. In 2007, from 1/1/07 to 9/3/07 - 231 condominium units sold in the West Maui area for a total value of $186,918,128.
Mortgage Rates for week of August 27, 2007 - from Town Island Mortgage, LLC -
Rates: Houses & Condos Full docs: 6.0% 30yr fixed 2.0 pts (6.23 APR); 6.25% 30yr fixed 1.0 pt (6.38 APR); 6.50% 30yr fixed No Points (6.59 APR); No Docs: 6.375% 30yr fixed 1.0 pt (6.50 APR); 6.00% 15yr fixed 1.0 pt (6.13 APR); Interest Only: 6.75% 30yr fixed 1.0 pt (6.88 APR); and To $1M: 6.50% 30yr fixed No Points (6.59 APR). No Income, 100%, & Stated Land loans, too (Pts incl. origination)
If you would like to view the most current sales statistics for Maui or West Maui Condominiums, you can go to my web site www.JamesBFoster.com and click on Condo Sales in the upper left corner of the home page or go to www.JamesBFoster.com/condosales.php.
Some recent news about what is going on in Maui.
Weather - As we progress in to September, the weather continues to be fantastic and has been around 88 degrees during the day and cooler in the evening. Today, it is 87 degrees, sunny with light trade winds. Lucky to be on Maui, come visit and enjoy!
Flossie passed Maui by – Hawaii was bracing itself for a second Hurricane, but like the first one, this one passed most of the islands to the southwest. One of two things that helps to save the Hawaiian Islands from severe tropical cyclones are the shearing winds that diminish the strength at the top of a cyclone and the cooler seawater as the system moves into Hawaiian waters. The island of Hawaii had heavy winds and rain in the Hilo area and were also jolted by a magnitude-5.4 earthquake Monday evening, August 13th. We all breathed a big sigh of relief.
Maui Hotel Occupancy dropping - Maui’s hotel occupancy has continued to drop. Figures released by Hospitality Advisors earlier this month showed that for the first six months Maui island’s rate was down from 82.2 percent to 76.1 percent. Visitor head counts have been stable, while rooms have been subtracted from inventory. One problem is time shares are not included in the voluntary survey conducted by Smith Travel Research for Hospitality Advisors. When you factor in the condominium being rented as vacation rental accommodations and the cruise ships we are beginning to see a shift of a sizable numbers of tourists shifting to accommodations other than hotels.
Sale of ResortQuest Hawaii – Previously ASTON and then a name change to ResortQuest. In late May, Gaylord sold ResortQuest Hawaii, the former Aston Hotels, to a subsidiary of Barry Diller's Interval International, part of Interactive Corp. (Nasdaq: IACI) for $109 million. The 26 hotels and all-suite condominium resorts are on Oahu, Maui, Kauai and the Big Island. Rumor is that they will be focused on higher volume and not necessarily the ADR(Average Daily Rate), but again this is just a rumor.
Added construction should wait until infrastructure built – Hopefully the Maui County Council and the political powers that be will understand the concept and stop approving any new developments until the infrastructure is in place. We need the water, sanitary sewer, storm sewer, roads and affordable housing to provide to all of our service workers. It is insane to continue issuing approvals until the infrastructure is available.
Maui Water Supply - A new approach is needed to accurately plan Maui’s future water supply. The Maui island aquifer map on the state Water Commission Web site shows Maui Island has a “sustainable yield” of 476 million gallons a day of available groundwater but this is probably not accurate. Department of Water Supply Director, Jeff Eng, recently said his department is working with USGS to get updated water data for West Maui. Maui needs to update the sustainable yields of all of Maui’s active aquifers to plan for future growth and development.
Maui Community College’s Lahaina Center – Higher Education opportunities are now available without the long commute to the other side of the island. MCC opened the Lahaina Center last fall and it is now offering more college credit and noncredit courses.
People attending classes at the MCC Lahaina Center can earn college credits, gain workplace training and earn four-year and master’s degrees through the University of Hawaii Center. There are plans to offer college-level courses for high school students and, for youths 11 and older, after-school programs and summer-enrichment activities.
Courses at the Lahaina Center are delivered in three ways: “live” with an instructor on the campus; through the Hawaii Interactive Television System, or HITS, which is a two-way televised system with the instructor in one place and the students viewing the classes via television at the center; and through the Internet.
Ritz-Carlton in Kapalua has new general manager - Tom Donovan has been appointed general manager of the Ritz-Carlton, Kapalua and will lead the AAA Five-Diamond resort’s $125 million renovation project slated for completion in January 2008.
The transformation of the Ritz-Carlton in Kapalua will have 445 fully renovated guestrooms, including 107 Residential Suites, with dark wood floors, new marble bathrooms, flat-screen LCD televisions and Hawaiian-inspired artwork; redesigned restaurants; a new spa and fitness center with Hawaiian-inspired treatments; renovated meeting space; an Environmental Education Center; new children’s pool and an enhanced Ritz Kids program.
New Development of 940 Units Proposed – Kaanapali Land Management Corp. (KLM) unveiled plans for Pu’ukoli’i Mauka, a 940-unit development proposed at the former Pu’ukoli’i Village plantation camp. KLM would request of the Hawaii Housing Finance and Development Corp. and state Land Use Commission a change of two key conditions: reduce the number of affordable units from 60 percent to 51, and eliminate the requirement that construction cannot commence until the Lahaina Bypass is built, Hanzawa explained.
Medical Facilities on Maui - The Association for Improved Healthcare on Maui (AIHM) http://www.aihm-maui.org whose mission is to serve as an advocate for the creation of a system that will provide improved healthcare services to all of the citizens and visitors of Maui County has been making some excellent progress. For more information on making a contribution to this great cause, please visit www.aihm-maui.org/ourfriends.htm. To stay informed of what is transpiring with future approvals of either the Kihei or West Maui hospital, you can send me an email and request a subscription to the “Coconut Wireless” to either my email at Jim@JameBFoster.com or Jan@SunshineRainbows.com
Benefits of Yoga - Famous author Dr. Wayne Dyer discovered the benefits of yoga
at Bikram Yoga in Lahaina. Dr. Dyer had been an avid runner from 1976 to 1998 but the joints began to hurt and another way to exercise was needed. The studio is heated to relax the muscles and help in healing and detoxing the body. Some of the benefits of doing yoga are: reducing stress, increasing flexibility, increasing energy, increasing muscle tone, lowering blood pressure, losing weight, improving concentration and preventing injury and disease. Yoga will also stretch the spine. Bikram Yoga of Lahaina is located at 900 Front St., Suite F17, at Lahaina Center (across from the movie theater). You can call 661-6828 for more information. Kama’aina introductory rates are available. For more information on Dr. Wayne Dyer go to his website at www.drwaynedyer.com
Space still available in the new Commercial project in the Lahaina Business Park - Located on the mountain side of Lahaina Cannery Mall and Honoapiilani Highway, a new Business Center is being developed that will be comprised of seven entitled, contiguous, commercially zoned parcels along Kupuohi Street totaling 3.27 acres, and an additional noncontiguous, 20,000-square-foot lot on Ulupono Street. Zoning allows for M-1 commercial mixed use. Construction of Phase I is scheduled to begin this month. Plans call for the development of a Class A, three-story, ocean view professional office building and a showroom/industrial building. Showrooms will range in size from 800 to 3,200 square feet, with prices for available spaces ranging from $358,000 to $675,000. Office sizes will range from 847 to 1,495 square feet, prices for available office spaces check in at $475,000 to $771,000.
Lahaina Bypass Status - Construction of the Lahaina Bypass has been delayed once again. Archaeological sites were discovered during recent field survey. More updates in September. For current information visit www.LahainaByPassNow.com
Wastewater plant in West Maui needs to be upgraded – The Honokowai facility needs to be upgraded and the odor is going to increase in severity until it is. Kapalua Mauka as well as the Kekaa developments will be adding to the overburdened sewage treatment facilities and causing more nutrient-rich water to be injected into our near-shore waters. We need to have the golf courses utilize reclaimed water for the several million gallons a day they use for golf courses and irrigation needs and to let more of the natural flow remain in Honokohau Stream instead of using it for their golf course. We need to take the burden off of the sewage system and through the use of impact mitigation fees put the additional costs for upgrading our infrastructure where it belongs.
Superferry for Hawaii – On August 27th, the Hawaii Superferry was ordered to cease operations on a temporary basis at Kahului Harbor. The order was signed by 2nd Circuit Judge Joseph Cardoza and prohibits the state Department of Transportation from allowing the Hawaii Superferry to operate in Kahului Harbor through Sept. 6, while the court scheduled a hearing Wednesday on a motion for an injunction to permanently block the ferry until all environmental reviews are completed. The judge’s restraining order was issued in the wake of a unanimous Hawaii Supreme Court decision that the state was wrong to bypass an environmental study for improvements at Kahului Harbor to accommodate the Superferry operations. An environmental assessment could find no significant impact or could require preparation of an environmental impact statement. The assessment is expected to take several months to complete, while an environmental impact statement that includes recommendations for mitigating any impacts could take years to prepare.
Proposed Bill to downsize superstores - Maui County Council Planning Committee took an initial step Tuesday on a bill to amend county zoning laws to prohibit large discount retailers, sometimes known as “superstores.” The proposed bill would set limits on retail facilities or expansion of retail facilities exceeding 90,000 square feet, offering more than 25,000 different products or dedicating more than 20,000 square feet to groceries.
Real Estate & Financial Planning Tips
Purchase Contract (RR2-1) - The Old Standard real estate contract, known as the Deposit Receipt Offer & Acceptance (DROA) has now been replaced by the new standard real estate contract and is called “Purchase Contract” (RR2-1). If you would like a copy of the new contract, send an email to me with your request or call me on the phone 1-888-661-7994 and we will mail one to you. Also, we are going to be seeing more Agreements of Sale and Purchase Money Mortgages, both of which are forms seller financing to assist buyers with the purchase. If you would like a copy of these forms let me know and we can email one to you.
An excellent idea for owners or prospective sellers is to have a Net Proceeds Statement prepared as property values change. This outlines the various costs a seller has at closings and is an important item to have in your files. If you would like to know what your net proceeds would be if you sold at a particular price, let us know and we can prepare one for you and email you the document in an ADOBE pdf format. If you are not a Hawaii resident, you will have to deal with the Hawaii Real Property Tax Act (HARPTA) when your property sells and 5% of the selling price is withheld unless you do a tax deferred exchange or have transferred title to a Hawaiian registered entity such as a Limited Liability Company. HARPTA is not a tax. This is a common misunderstanding. HARPTA was enacted to provide a means for the state to collect capital gains taxes from absentee owners. HARPTA is very similar to laws passed by several other states as well as to a federal law that applies to non-US citizens that sell real estate called FIRPTA. These are items to discuss with your attorney and accountant.
You should also once a year request the real estate broker/agent that you work with to provide a current market value and keep this in your file. At the time of death for the property owner(s) whether married or single, the surviving spouse or heirs will have a new basis, called “stepped up basis”, calculated which is typically the market value of the property as of that date. An opinion letter from a “real estate expert” will typically suffice. If you have questions about this call me at 1-888-661-7994.
Probate & Estate Planning in Hawaii – When working on probate issues or situations or doing estate planning involving property in Hawaii, use Hawaiian legal counsel in concert with your attorney to make sure you are in compliance.
- Hawaii is a "Separate Property" State, which generally means that at death assets in your sole name will pass to those you have designated in your will. However, a surviving spouse may elect to take a percentage of your estate, regardless of what your will says -- including probate assets, insurance, trust property -- depending upon the number of years of marriage. After 15 years of marriage, the spouse is legally entitled to a full 50% of your estate. Certain assets are excluded and a rights of a spouse may be waived in advance by agreement, including a prenuptial agreement.
- If you move to Hawaii from a community property state, the community property assets you bring into Hawaii may retain their status as community property, but only if you are careful in your planning. Maintaining community property generally affords a more favorable capital gains treatment for appreciated property after one spouse dies.
- In Hawaii, if non-real estate assets in a person's sole name at death do not exceed $100,000 (not counting the value of any autos), there is no need for a probate, and the assets and any autos may be collected by the rightful beneficiaries or the person named in a will as the personal representative using a simple Affidavit and a certified copy of the death certificate.
- Hawaii law allows a married couple to hold any property, real or personal, as Tenants by the Entirety. This type of ownership has rights of survivorship for a surviving spouse. Hawaii allows any type of property, real or personal, to be titled in this tenancy. Property held by the Entirety is deemed to be owned by the marital unit. Consequently a creditor seeking recovery against only one spouse will in most cases be unsuccessful in attaching any of the property held in this form.
- Although Hawaii has a state tax on income, qualified retirement plan income is exempt from state taxation, making it easier to retire in paradise.
- In 1999, Hawaii adopted a modified version of the Uniform Health-Care Decisions Act. This law combined the features of a "living will" with those of a durable power of attorney for health care decisions, creating a vehicle for a customized Advance Health-Care Directive.
- Hawaii has a complicated system of land transfer and recording. All recording of deeds and other related documents is done at the State level, either in the Bureau of Conveyances system, in the Land Court system, or in both systems. As such, there are no statutory deed forms and a Hawaii attorney will likely be required to assist in preparation of transfer documents to a revocable trust or to another person or entity. Similarly, there are no statutory powers of attorney in Hawaii.
- Hawaii has only a "piggy-back" estate tax, meaning that it merely takes the maximum amount allowable as a tax credit for state taxes on the federal estate tax return, and does not impose any additional estate tax on a person's estate at death. As the law now stands, no Hawaii estate tax will be due in any event, as Hawaii has not "decoupled" from the federal estate tax law.
- If a non-resident of Hawaii has died owning real estate in Hawaii, in most cases the property may be transferred without an ancillary probate, through a simple Acknowledgment of Authority procedure wherein the personal representative in the home state is granted authority to act in Hawaii.
- Revocable and irrevocable trusts have been around for many years in Hawaii and assets held in trusts will generally avoid probate. If a probate is required to transfer property in Hawaii, the relatively new changes to the Hawaii Probate Code provide for a less expensive and more efficient probate or intestate administration. Attorney's fees are no longer based upon a statutory percentage of the value of the estate, and must be reasonable as reviewed by the Court. Most proceedings are handled on an informal basis, without court hearings.
In past newsletters, I have mentioned that the easiest way to minimize the tax impact when selling is to do a tax deferred exchange. If you have questions about tax deferred exchanges give us a call. If you are considering selling your property in Hawaii, a tax deferred exchange will exempt you from the 5% HARPTA withholding and also the Federal Capital Gains Tax. Planning in advance for the disposition or acquisition of assets is always a wise decision. Another invaluable tool for sellers in doing a tax deferred exchange is having the option of using tenant-in-common (TICs) for qualifying for replacement properties. Many property owners who currently own underperforming assets can sell those assets, taking advantage of tax deferred exchanges, and turn an underperforming asset such as land into an income producing asset. Call me or send me an email if you would like additional information at 808-661-7994 or email Jim@JamesBFoster.com
To facilitate the tax deferred exchange process for our clients, we have placed our securities licenses with Welton Street Investments, LLC. Welton Street is the leading NASD Member Broker/Dealer formed exclusively to work with commercial real estate professionals offering TIC(Tenant In Common) investments as 1031 exchange options and direct investments. Welton Street works with quality TIC real estate sponsors, providing access to a broad and deep array of institutional quality TIC investment properties providing due diligence, research & securities compliance. Welton Street utilizes three key areas of due diligence before real estate sponsors and TIC investment replacement properties are selected and presented for investor consideration: 1) Audit and Analysis of the Real Estate Sponsor; 2) Analysis of TIC Program Structure & Fees; and 3) Analysis & Underwriting of Replacement Properties.
If you are contemplating selling highly appreciated real estate during 2007 and would like for us to provide an analysis of how to best structure your transaction, please call us at 1-888-661-7994 or send us and email at Jim@JamesBFoster.com
Useful Internet Sites:
www.carmd.com An auto mechanic in your pocket while driving or when getting ready go on a trip or to buy a car. Since 1996 auto manufacturers have built in a small port under the dash that allows mechanics to diagnose car problems. Now you can get an easy to use handheld tool that you can use to keep the mechanics honest. Backed up by a powerful web based car diagnostic center this tool will give you a full report on a cars current health in plain English and the estimated cost to correct any problems. This gadget has lots of additional bells and whistles to help keep you informed about your car’s health.
www.mailinater.com This site will provide you with complete anonymity when using e-mail and can also be a great protection against unwanted spam. You don't have to sign-up for anything or even tell these folks you’re using their service. You don’t even have to visit their site, just make up an email address (@ their domain) whenever you need it. Use it for web forms. Use it to reply to any message. Use it on forums. Then just check your mailbox at their site and then your correspondence is right there for you to ignore if you wish.
www.pcdecrapifier.com Ever notice how much junk comes installed when you buy a new PC? This is because PC manufacturers get paid handsomely to add in trial versions of all sorts of programs and services. Most likely you’ve seen them when you started up your fresh new PC and find it’s not so fresh but loaded with services like AOL, EarthLink plus games, jukeboxes and the list goes on. Despite its unusual name, this product will identify and remove any or all of this junk. There is no cost for personal use.
www.lifelock.com With identity theft rampant this is an important service with modest fees. Lifelock is not like credit monitoring, they are the next generation. They are the lock, and you hold the key. If your Identity is stolen while being a client, Lifelock will go out and hire the right people to work to get your good name back and it won't cost you one red cent. If you lose money they guarantee to re-imburse you all the way up to $1,000,000.
www.carbonite.com Here is a great back-up system for the files on your computer. Carbonite is an online backup service that starts automatically and works quietly and continuously in the background protecting your data. If you accidentally erase something they have the copy. You can restore deleted files with just a few clicks on your PC. If your PC crashes, just visit their website to recover lost files. The service is reasonably priced and invaluable if you lose your data.
www.accucoverage.com/ As we have all observed in the last couple of years hurricane and flood damage have been responsible for billions of dollars of loss. There have been horror stories of consumers having to deal with insurance companies to prove losses. If you have home owners insurance, you have the responsibility of insuring for the correct amount. To be sure that you are covered, you must know the current replacement cost of your home and you can at this web site for only $7.95.
http://www.Komando.com/ This is a great site for staying current on new technology, new software and internet issues.
Kindest Regards, Jim Foster
Chase 'N Rainbows Real Estate, Inc.
P.O. Box 10398
Lahaina, HI 96761
Toll Free 888-661-7994
Direct Line 808-661-7994
Cell 808-870-5858
Fax 808-667-2957
Real Estate for Sale www.JamesBFoster.com
Vacation Rental www.ChaseNRainbows.com
Email Jim@JamesBFoster.com
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